Media captionBarack Obama: "Borders cannot be re-drawn at the barrel of a gun"

Russia's president has said he is hoping for a peace deal between Ukraine and pro-Russian rebels by Friday.

Vladimir Putin urged both sides to stop military action in eastern Ukraine, adding that his views and those of his Ukrainian counterpart were very close.

Ukraine President Petro Poroshenko said they had agreed a "ceasefire process" but PM Arseny Yatsenyuk said no plan from Mr Putin should be trusted.

In Estonia the US president sought to reassure the Baltic states over Russia.

"You've lost your independence once before, with Nato you'll never lose it again," Barack Obama said in the Estonian capital Tallinn.

Media playback is unsupported on your device

Media captionWatch: Timeline summary of the Ukraine conflict

He told his audience of US and Estonian military that their countries were stronger because they were democracies, but that their vision was threatened by "Russia's aggression against Ukraine".

He said that there were "provable facts" that Russian combat forces were on the ground in Ukraine.

"Nations have a right to determine their own future. This is why we stand with the people of Ukraine today," he said.

He added that Nato had to send an "unmistakeable message in support of Ukraine this week", as well as strengthening the defences of two other former Soviet republics, Georgia and Moldova.

A Nato summit opens in Wales on Thursday. It is expected to back plans for a rapid response force and bolster the alliance's presence in Eastern Europe.

Analysis: Oleg Boldyrev, BBC News, Moscow

Insisting that Russia is in no way a negotiating party in the Ukrainian conflict, Vladimir Putin is nevertheless certain that it is Moscow's proposals that are going to advance both sides to peace. Mr Putin's plan is short and leaves a lot of room for interpretation.

Take, for example, a point on moving Ukrainian troops away from positions from which towns and cities can be shelled. Taken to an extreme, this could mean rewinding the situation on the ground to a point several weeks ago before Ukrainian advances.

Just two weeks ago the discussions centred around when, and not if, the rebels would have to move out of Donetsk and Luhansk. But Moscow's plan will allow them to strengthen their control over the two regional centres and other areas.

Mr Putin has often seemed unwilling to negotiate from a position of weakness and the reversals of the past few days illustrate this perfectly. Now it's Petro Poroshenko who has to choose whether to accept something which clearly protects Kiev's enemies in eastern Ukraine.

In other developments

Russia confirmed the death of journalist Andrei Stenin in Ukraine on 6 August, saying he had been killed in a Ukrainian government ambush on a convoy of rebels and refugees near Donetsk

Russia is to hold military exercises in the south Siberian region of Altai this month involving more than 4,000 troops and air power, a defence ministry official told a Russian news agency

'Mutual understanding'

Speaking to journalists in the Mongolia capital Ulan Bator, Mr Putin said the two sides should reach agreement when they resumed talks in Minsk on Friday.

"Our views on the way to resolve the conflict, as it seemed to me, are very close," he said, referring to a phone conversation with Mr Poroshenko.

Image copyrightReutersImage caption
A Ukrainian policeman removes a weapon found in Sloviansk, Donetsk region, on Tuesday

Image copyrightAPImage caption
US President Barack Obama reassured Estonian President Toomas Hendrik Ilves (right) in Tallinn that his country had Nato's support

The Ukrainian army and eastern rebels should stop "active offensive operations"

Ukrainian troops must pull back to a distance where they would be unable to shell population centres

International monitoring of the ceasefire

No use of military jets against civilians

"All-for-all" prisoner exchange without preconditions

Humanitarian corridor for refugees and to deliver aid

Restoration of destroyed infrastructure.

In its statement (in Russian), the Kremlin said a phone conversation had taken place on Wednesday between the two presidents in which their points of view had "coincided significantly" on possible ways to end the crisis.

Mr Putin's spokesman, Dmitry Peskov, clarified for Russian news agency Ria-Novosti: "Putin and Poroshenko did not agree a ceasefire in Ukraine because Russia is not party to the conflict, they only discussed how to settle the conflict."

Mr Poroshenko said he also hoped for a ceasefire.

"The people of Ukraine want peace while some politicos want to play a game of war. I will not allow this to happen. We must pull together in fighting for peace," he said.

But Ukrainian Prime Minister Arseny Yatsenyuk rejected the proposal.

"The real plan of Putin is to destroy Ukraine and to restore the Soviet Union," he said.

War in eastern Ukraine: The human cost

At least 2,593 people killed since mid-April (not including 298 passengers and crew of Malaysian Airlines MH17, shot down in the area) - UN report on 29 August

951 civilians killed in Donetsk region alone, official regional authorities said on 20 August

In some particularly dangerous places, such as Luhansk region, victims are said to have been buried informally, making accurate counts difficult

Rebels (and some military sources) accuse the government of concealing true numbers

260,000 people have fled elsewhere in Ukraine while at least 814,000 have gone to Russia.

Pro-Russian rebels said they supported Mr Putin's proposals but that they did not trust Mr Poroshenko to observe a ceasefire.

Meanwhile a Ukrainian official in Zaporizhzhya region, west of the combat zone, said the bodies of 87 soldiers and pro-government volunteers killed in a controversial incident near the town of Ilovaysk several days ago had been brought to a local morgue.

The Ukrainian military says troops were fired on by rebels on Sunday after they had apparently been given safe passage out of an encirclement during rapid rebel advances. No-one has been able to confirm the circumstances of the killings or the total number of dead.

More than 2,600 civilians and combatants have been killed and more than a million people have fled their homes since fighting erupted in eastern Ukraine in April, when pro-Russian separatists there declared independence.

Russia has denied accusations by the West and the Ukrainian government that it is sending troops and military equipment over the border to support the separatists, who recently gained the upper hand against government forces.